Bank chief demands pay cut for fat cats

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The Independent Online
Top bosses in the privatised utilities must have their pay cut, according to the Deputy Governor of the Bank of England, writes Diane Coyle.

Howard Davies says, in a BBC radio programme to be broadcast today, that some companies which have been in the firing line over directors' pay - ``and they know who they are'' - must reassess their decisions. ``It is going to cost some individuals some money. They can afford it,'' he says.

Cedric Brown, chief executive of British Gas, features as one of the main examples of a "fat cat" who has offended public opinion. The programme is a personal view made before Mr Davies, former director-general of the Confederation of British Industry, started his new job at the Bank of England this week. Nevertheless, its clarion call for action on executive pay is likely to embarrass the Government.

``Cedric Brown and Sir Richard Greenbury pushed Hugh Grant and Liz Hurley off the front pages. Something has gone badly wrong,'' he says. Sir Richard chaired the CBI's committee on executive pay.

Mr Davies argues that some privatised companies have lost public confidence. ``People accept that there will be a difference between pay at the top and the bottom of the company, but if directors keep awarding themselves double-digit increases, while offering inflation plus nothing to the staff, there will be problems.''

Letter from the Boardroom, BBC Radio 4, 9.45am today, and 6.15pm on Sunday.